Find out more about Accounts Receivable Software
What is Accounts Receivable Software?
Accounts receivable software is typically used to perform accounting and financial functions. The solutions range from simple single-entry apps for check writing and bookkeeping to advanced double-entry systems that include a general ledger. Sophisticated platforms offer extra features such as inventory, fixed assets, invoicing, and more. Accounts receivable software provides plenty of benefits as you can use it to automate your routine tasks, eliminate manual errors, keep your books accurate, get timely notifications to avoid penalties and more. Growing companies especially need a good quality accounts receivable software. You can start your search for the right system by browsing the leading solutions in this category, particularly FreshBooks that currently ranks as the best solution.
Most Popular Accounts Receivable Software
Best Accounts Receivable Software
How To Choose The Best Accounts Receivable Software
Before we begin, let us peak into some statistics: The way how our business environment looks right now, almost 40% of invoices are paid with delay, almost 20% of customers avoid adhering to credit terms, and almost 50% of them delay their payments. In order to avoid making the landscape more terrifying, we’re going to skip mentioning the percentage of managers sitting behind their desks and wondering whether to ask for another payment extension. This being said, we operate in an online business environment where we can no longer rely on manual work to obtain tangible results. That’s, of course, unless we try to automate processes instead, and use the best Accounts Receivable software we can find.
What do companies that use accounts receivable software have in common? Explained in simplest terms, automating receivable management equals the hiring of an ideal accountant that would always listen to your suggestions (but will make great decisions even on his own), pay attention to every detail, and most importantly – one that would work 24/7! Sounds attractive, doesn’t it? What matters, however, is to choose the best Accounts Receivable software for enterprises, and that’s what this guide will help you to do.
Get to know each product with free trial
First of all, a good course of action is to sign up for at least a few free trial plans from the vendors that are popular. With that method you will have the opportunity to test the important elements and you will get a good overview of the capabilities of each app. The best thing to do is to try services that currently have the highest results in our SmartScore and Customer Satisfaction Rating in the Accounting and Finance software category: FreshBooks reviews, Intacct, Xero, Zoho Books, Zoho Invoice, AccountEdge, and KashFlow.
A/R measurement is critical for every success-orientated business, but there are still few specific cases in which a company must consider getting one. Those cases were the rationale for the creation and development of these programs which in their today’s form aim to intervene in the following scenarios:
- Small Businesses whose team is disconnected. It is vital for every business to allow access to receivable communications to all members of the team, namely to store them in a central repository to save time and keep people on the same page. That way, the company will also eliminate the risk of losing valuable data (customer correspondence in particular).
- Medium Businesses that are struggling to report and to use data for their scaling plans. Good management of accounts receivable actually refers to being able to reach customers without outsourcing and additional staff, but that obviously requires data to be summarized in a comprehensive manner. Accounts receivable software is usually packed with report and analytic features that allow you to develop unique payment options, and to keep employees connected with each other and with your customers.
- Large Businesses that lack accurate data. It is easy to deviate from the truth when working in a 5000+ team and have twice as much regular customers. Unfortunately, for many companies accounts receivable are still sticky notes, legal pads, and spreadsheets passed between employees with no central platform to compare invoices. A good Accounts receivable program would not only unite data, but gather it directly from customers.
What are Examples of Accounts Receivable Software?
- FreshBooks: One of the best cloud solutions for small business that streamlines tracking and invoicing. It allows you to collect payment online, and it is packed with advanced analytic features.
- Intacct: Another highly-efficient cloud solution for small and medium businesses that provides statistics and key figures to help companies make smarter decisions.
- QuickBooks: Simple and very popular software for small businesses that are just beginning to manage accounts receivable. It checks invoices and purchase orders and eases business transactions.
- Xero: An online accounting app for businesses from all scales and industries, but also individual accountants and bookkeepers. It focuses on collaboration, and keeps teams connected wherever they are.
- FinancialForce Accounting: Easy-to-use and maintain platform that provides an affordable end-to-end accounting solution for businesses from all scales.
- Zoho Invoice: an accounting solution ideal for any company that creates and manages invoices. It has been specifically designed for sole proprietors and smaller businesses.
Types of Accounts Receivable Software
There are many different types of accounts receivable software tools, varying from free and basic tool suites to ultra costly and accurate programs. The list of features can also be categorization criteria, as certain programs do nothing but online accounting, while others are more robust and they allow accountants to manage third-party payrolls, track the entire sales cycle, and even do some custom branding. Deployment is also an important factor based on which there are:
- On-premise accounts receivable programs. These are covered with a single license, and are hosted on the client’s local server. They qualify as the most expensive ones, due the fact that they require complex setup and occasionally some hardware installation.
- Software-as-a-service (SaaS) accounts receivable programs. These are usually paid per month, and are hosted on the vendor’s server. The business owner is not responsible for installation, updating, and maintenance.
- Cloud-hosted accounts receivable programs. Most of these offer free basic plans, and qualify as the most affordable ones due to their universal access and the fact that the client doesn’t need to update them or to pay for maintenance.
Key Features of Accounts Receivable Software
When buying your first accounts receivable system or upgrading to a more powerful one, you should be looking for the following features:
- Accounts Receivable Ledger. The accounts receivable ledger is a list of customers and their due payments that ought to be updated every month. Therefore, it is an essential reporting asset that identifies and stores information, and a good AR system cannot function properly without it.
- Accounts Receivable Aged Listing. This function will organize accounts receivable based on payers and dates, the ranges and columns being completely customizable to respond to the specific needs of your business. Obviously, this is another vital source of information you can use to perform reporting.
- Customer Statements. Customer statements won’t be much different than the ones you’re printing now, but the mismatch will consist in the fact that you don’t have to enter information manually, and to double-check whether you’ve updated it. Customer statements are important to you because they fill the gap of reporting to customers their hanging and outstanding obligations.
- Individual Collection Letters. The function ensures prompt and timely collection of receivables, most of the time using criteria prescribed by you. As time goes by, collection letters will become stricter, and your biggest benefit here is that wording will be automated in every single case.
- Centralized Database. Last, but not least, your AR system is supposed to store and secure data in a centralized database. Ideally, you should be able to track information months and years back, using detailed categorization and advanced search filters.
Benefits of Accounts Receivable Software
Accounts Receivable software is a genuine proof that automating processes can have amazing results, or at least that’s what satisfied users have shared. According to them, AR systems are more than likely to improve your market position and to reduce the stress of not being able to meet your financial obligations. Thereof, we comprised a list of critical AR software benefits every company should consider:
- A better cash-out position. AR systems make you focus on accounts receivable, and develop better prioritization practices to identify and close invoices earlier in the process. As a result, you will have more disposable means on the table, or at least a precise scenario of how your cash position looks like. This is critical for every company to be able to cover its financial obligations, so think about it!
- Improved capital control. This comes somehow logically: if money is enough to cover everything, it means you’re handling it just fine. Thanks to developed AD systems, you understand your cash position, and you orientate capital towards better business decisions (prompt purchases, quality hiring, improved invoice collection, business-growth investments, and so on).
- Better communication with customers. AR software usually encompasses a variety of communication facilitating tools, such as instant access to information, customized emails with attached invoices, merged documents, and logged phone calls. With the very best scenario, you will be also able to store this information and to use it for reports. Needless to say, the way in which you communicate with customers is the core of your credibility, so the more professional it gets, the more awards you’ll have to reap from it.
- Reduced administrative costs. The critical improvement of your billing process is that you’ll start handling invoices digitally and that will automate administrative procedures too. Automated processes don’t only refer to your customers, but also your employees and partners who’ll get rid of printing, stamping, and sending documents manually.
- Shorter payment cycles. The way how sales cycles usually look nowadays, they require plenty of time and expenses to be closed. The role of your AD system in the case will be to allocate the resources needed to cover that order in a more appropriate and economical way. If nothing else, you will approve projects much quicker than before, which is already a chance to be paid sooner. Meanwhile, invoices will be sent to customers automatically, and there will be a specific customer portal with information to give them more options for accelerated or off-the-shelf payment.
- Efficient AR management. If you think about it, getting paid late is the least annoying part of the payment process: what can be really frustrating is keeping track or who is supposed to pay what, reminding debtors, and resolving issues related to the payment itself. That’s the biggest advantage of AR software – it simply allows you to stay in control! You won’t need to prepare in advance for reminding customers of their invoices, you will reduce the time necessary to prioritize tasks, you will deal with significantly fewer disputes related to the ‘I wasn’t told’ problem, and you will spend more time soliciting payment than your current work line can allow.
- Minimal credit risk. The credit that needs to be extended to customers is the eternal retail dilemma. Managers are continuously stuck in complex risk calculations, time predictions, and unpleasant communications. AD systems can be of great help for the purpose, as they allow you to gather relevant information from third parties, and to control exiting relationships for sudden risks. More precisely, you will be able to generate credit reports where customers are categorized using risk estimations, to deliver credit applications, to work with your own scoring formulas, and to notify customers on time.
List of Accounts Receivable Software Companies
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Every vendor in the Accounting & Finance Software category will provide a different group of pricing packages for its service and each package will include a unique set of elements. Below we list the overal pricing for the cheapest plan provided for each app. Please note that advanced features may cost extra.
An overview of what kind of devices and operating systems are supported by the listed B2B solutions in the Accounting & Finance Software category, including mobile platforms and web-based solutions.
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An analysis of which groups of companies a given B2B service in the Accounting & Finance Software category aims for, from small businesses and non-profits to big enterprises.
A summary of what kinds of service deployement are supported by every B2B vendor in the Accounting & Finance Software category. While the majority of modern SaaS services are cloud-based there are services may offer an on-site deployment model as well.